Pork and meat processor
had an increase in first-quarter earnings as a result of higher domestic hog market prices.
The company earned $22.1 million, or 20 cents a share, and matched analysts' estimates. A year ago, Smithfield had a profit of $11.8 million, or 11 cents a share.
Smithfield said earnings in its hog production segment benefited from a 22% increase in market prices. However, those prices "moderated significantly" during the quarter because of higher shipments of live hogs from Canada into the U.S. Prior to the first quarter, live hog prices had been depressed in the U.S., and generally below break-even, for nearly a year.
During the quarter, higher shipments of live hogs from Canada resulted from lower Canadian live cattle prices following the report of a case of mad cow disease in that country in May. The U.S. Department of Agriculture imposed a ban on the importation of ruminants and ruminant products from Canada, including beef, cattle and animal feed in response to the report. The weakened cattle market in Canada triggered a decline in demand for pork and an increase in live hog and fresh pork exports to the U.S., where prices were higher.
Smithfield's total sales reached $2.21 billion, compared with $2 billion a year ago. Hog production sales totaled $335.8 million in the quarter, up from $273.8 million last year. Pork sales rose to $1.16 billion from $1.05 billion, and beef sales climbed to $605.4 million from $559 million last year.
The recent partial lifting of the Canadian beef ban should slow Canadian hog exports in the future, the company said. Smithfield also said earnings in fiscal 2004 should be "well above" 2003, when the company earned 25 cents a share. Smithfield's shares were losing 24 cents, or 1.1%, to $20.97.
reported a 9% drop in third-quarter earnings despite an improvement in overall sales and a strong performance in its refrigerated foods unit.
The company earned $34.7 million, or 25 cents a share, vs. $38.3 million, or 27 cents a share, a year ago. Analysts were expecting 27 cents a share. Revenue rose to $1 billion from $933.8 million last year.
"Refrigerated foods operating profit increased sharply as a result of normalized pork contract results and higher demand for Hormel-branded value-added products," said Joel Johnson, president and chief executive. "The very difficult turkey market put more pressure than we anticipated on our overall performance and caused us to miss our guidance range by 2 cents a share."
Hormel expects the fourth quarter to again be difficult for its turkey segment and projected earnings of 36 cents to 44 cents a share, below analysts' forecast of 51 cents a share. Shares of Hormel were down 2 cents to $21.76 recently.
first-quarter earnings jumped on a 27% rise in sales, helped by strength in the company's Jif and Crisco products.
Including charges, Smucker earned $25.8 million, or 51 cents a share, compared with $16 million, or 39 cents a share, last year. Excluding the charges, the company would have earned 55 cents a share, 5 cents ahead of estimates.
Sales rose to $350.3 million from $274.9 million last year. Jif and Crisco contributed $156.1 million to sales, up from $87 million a year ago.
"In the second quarter we will be debuting new advertising campaigns for our Smucker's, Jif, and Crisco brands," said Tim Smucker, co-chief executive officer. "During the latter part of the year, we expect to focus a great deal on the previously announced restructuring project, which is progressing as planned, and our new Uncrustables facility with the goal of increasing our profitability as we continue to grow sales."
Smucker forecast full-year revenue growth of 6% to about $1.4 billion with earnings of $105 million to $108 million, or $2.10 to $2.15 a share, including restructuring costs. Excluding the costs, the company sees earnings of $113 million to $115 million, or $2.25 to $2.30 a share. Analysts expect $2.30 a share, on average.
Smucker's shares were gaining 39 cents, or 1%, to $39.27 in recent
New York Stock Exchange